These are uncertain times for employee benefit brokers and consultants. "Obamacare" and the minions in the federal agencies are entrenching national health care with speed and design. Most recently, brokers found out that pay for the various services they provide employers will be placed on the administrative side of carriers' ledgers, making commissions subject to the law's medical loss ratio restrictions.
Then came the mid-term elections on Nov. 2. It's old news now, but Republicans staged a major comeback, especially among governors, in state legislatures and in the U.S. House of Representatives. The presumptive future Speaker of the House, Rep. John Boehner, declared that PPACA will either be repealed, replaced piecemeal with more common sense solutions, or defunded altogether.
Regardless of any change in the nation's political winds, you and I will remain. We will continue practicing our craft of selling, consulting and helping employers with their employee benefits.
I have three questions for you that require soul-searching, thoughtful answers. Your answers to these questions will determine your success or failure in the months and years ahead. Ready?
First, why should I, as an employer, buy from you? Second, what do you have to offer that the other consultant waiting in the lobby does not offer; and third, why is that important to me as an employer?
Think about each question carefully. Let it pierce your marrow when you think about yourself, your business and your client base. Your answer will mean success or failure for you and your firm as the future unfolds.
Charles Dickens opened A Tale of Two Cities with this famous line: "It was the best of times; it was the worst of times ... It was the spring of hope, it was the winter of despair; we had everything before us, we had nothing before us."
His oft-quoted prose encapsulates the key underlying issue: point of view.
What is your point of view?
My job - helping brokers of all sizes in different markets achieve better results - gives me a unique vantage point. I see some producers who have answered the three questions stated above well. They offer new, added value that the competition does not. They practice what is arguably the most important mantra in benefit sales today: differentiate, differentiate, differentiate! They are making lots of money, even in these uncertain times. Their books of business grow in good times and bad times alike.
Unfortunately, I also see some producers who are singing the blues because they can't seem to sell anything in this crazy economy with its frightening legislative backdrop. They are afraid, and I'm sorry for them.
What's the difference between these two types of producers? Can the answer really be boiled down to point of view and simply being different than the other guy? Successful producers know that when a value-added feature becomes a commodity that everyone else offers, it's time to drop that commodity like the bad habit it has become and move on to a new value-add that will keep the differentiator factor alive for them.
Here's a true story. Recently my FutureOffice Network was a contender to provide products and services for a well-known national broker. During the sales process I learned an important lesson: What producers and their bosses think will generate more sales is not necessarily what their clients and prospects actually want.
Clients and prospects want new, added value that helps them do their jobs. But many brokerages and consulting firms - and their producers - want pretty marketing items because they think that sells and keeps clients.
The truth is: Pretty pictures and articles do neither of those things.
Try telling that to the many brokers and consultants who think that is just the trick to generate more sales calls and AORs. A chasm exists today between what many sales people think customers want and what customers actually want. When you reconcile the two, the chasm disappears and you will take more AORs - but not before then.
Pretty-picture marketing is a passÃ© strategy that worked 10 years ago. Employers today want tools and services that help them. You will have a "me-too" strategy until you figure that out.
Conversely, if you are the only broker or consultant that offers those tools, you stand to make more sales. This is not that complicated, yet many brokerage firms do not seem to understand it. For these brokers and their weak value proposition, it truly is the worst of times.
How about you? Do you get it? I was shocked that the well-known national broker didn't. They're going with pretty pictures - yet in every market they serve, there are dozens of brokers spamming out the same pretty pictures. Does that make sense to you?
Look at the underlying sales production of the me-too strategy. The numbers for new business are just not there. It's maddening.
This should be a wake-up call to brokerage businesses of all sizes. The name of the game today is to provide tools and services that focus on the prospect or client, not what the broker thinks makes him or her look good.
I had to walk away from the deal, and everyone lost - except, that is, for the commodity factory, which keeps pimping an old story to the unknowing producers who are its customers. Sadly, that commodity factory is not alone.
So listen to your customers and think about what they need. Don't listen to your buddies down the hall who all agree on what they think the customer needs, when in fact it's not what the customer really wants at all.
Here's a lesson from the second largest broker in the world. Aon purchased Hewitt Associates. Why? Because Hewitt is a world leader in HR outsourcing. Hewitt was once primarily a benefits consultancy. They morphed, and so should you.
Or follow Marsh's example. Marsh pushed its Mercer consulting division into the brokerage market because of its expertise with employers in the five core disciplines that I've preached in this column for some time. That's what clients want - in addition to the true skill of purchasing insurance at good rates, of course.
I'm delighted to report that there are thousands of brokerage firms that understand the need to be more than a rate peddler. Those firms are growing rapidly - for them it is the best of times. Are you similarly positioned tactically and strategically for what lies ahead?
Today we're going through a time of great uncertainty. But the uncertainty will lift, and good times will return. That doesn't mean we wait it out. We adjust and adapt our strategies.
Here are two simple reasons to be optimistic about your future:
1) You can sell - and there is much to sell. Your ability to sell is what has made you successful. It will write the next, positive chapter in your career. Are you clear-minded and focused on selling? Many employers want to buy what you're selling. Conversely, if you lack resolve and the proper point of view, employers will sniff that out and you will not make the sale. Regain a positive point of view about your future, and then get out and sell. Offer new, added value and you'll sell more. And by all means, stop pushing marketing propaganda via e-mail and Web sites if all your competitors are doing the same. You're only hurting yourself.
2) Benefits are not going away. Cleanse your mind of the notion that benefits selling is going away. It's not going anywhere. You need some fortitude. It is the worst of times for the brokers who got scared and sold their businesses at fire sale rates. But it will be the best of times for you as you continue to sell health and welfare, and maybe move into 401(k) and other retirement products. Then there's the many low maintenance, high profit products like life and disability.
As former White House Chief of Staff Rahm Emanuel once said: "Never let a good crisis go to waste."
Don't waste this one - it will turn out to be a big opportunity for you, your firm and your career.
Davidson is a founder of Davidson Marketing Group, futureofficenetwork.com, and mysalesrockstar.com. He is also a lecturer at the Lubar School of Business at the University of Wisconsin, Milwaukee.
Report shows blended sales channels
The boundary between voluntary and employer-paid benefit sales is disappearing in an increasingly competitive climate where more brokers are abandoning territorial patterns, suggests new research from Eastbridge Consulting Group.The firm's 2010 Evolution of the Worksite Broker Spotlight Report found that more than 90% of traditional employee benefit brokers sell voluntary plans, while 68% of classic worksite brokers sell employer-paid products, and that there's now a significant overlap between the two groups.
Other findings show there's no longer a difference between brokers based on products sold and the difference in agency size has narrowed. Moreover, there's now a group of brokers who do not fall into either category based on their sources of revenue by product.
Eastbridge VP Bonnie Brazzell, noting that the entire benefits business is moving toward voluntary plans regardless of how such coverage is being sold, describes the research as the first quantitative study with evidence to support Eastbridge's prediction dating as far back as 2002 that these sales channels would blend.
"Benefits brokers had to start offering voluntary in order to satisfy the needs of their clients," she explains." As almost all benefit brokers started offering voluntary, worksite brokers started offering traditional employer-funded benefits - especially those plans that are ones where both the employer and employee pay a share of the premium.
"Worksite brokers were motivated to help employers with their benefit packages "but also saw the benefits brokers competing for the voluntary products," Brazzell says. "So they decided to offer employer-funded to be more of a one-stop solution for their voluntary clients.
"She believes this sales trend will continue and that at some point down the line "there won't be worksite brokers and traditional benefit brokers. They will all be benefit brokers, period - serving multiple solutions to their clients."
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